Benefits Of Forex Trading
By Cynthia Macy, Thu Dec 8th
There are many benefits and advantages to trading Forex. Hereare just a few reasons why so many people are choosing thismarket as a business opportunity:
1. LEVERAGE: In Forex trading, a small margin deposit cancontrol a much larger total contract value. Leverage gives thetrader the ability to make extraordinary profits and at the sametime keep risk capital to a minimum. Some Forex firms offer 200to 1 leverage, which means that a $50 dollar margin depositwould enable a trader to buy or sell $10,000 worth ofcurrencies. Similarly, with $500 dollars, one could trade with$100,000 dollars and so on.
2. LIQUIDITY: Because the Forex Market is so large, it is alsoextremely liquid. This means that with a click of a mouse youcan instantaneously buy and sell at will. You are never 'stuck'in a trade. You can even set the online trading platform toautomatically close your position at your desired profit level(limit order), and/or close a trade if a trade is going againstyou (stop order).
3. PROFIT IN BOTH 'RISING' AND 'FALLING' MARKETS: On the stockmarkets, you can only make money if shares are rising, but ineconomic recession and falling 'bear' markets, there is littlechance of making big money. Forex is different. One of the mostexciting advantages of FX trading is the ability to generateprofits whether a currency pair is 'up' or 'down'. A trader canprofit by taking a 'long' position, (buying the currency pair atone price and selling it later at a higher price), or a 'short'position, (selling the currency pair and buying it back at alower price). For example, if you think the US dollar willincrease in value vs. the Japanese Yen then you will buy Dollarsand sell Yen (go long). If you think the Yen will increase invalue
against the Dollar then you will sell Dollars and buy yen(go short). As long as the trader picks the right direction, apotential for profit always exists.
4. 24 HRS: From Sunday evening to Friday Afternoon EST the Forexmarket never sleeps. This is very desirable for those who wantto trade on a part-time basis, because you can choose when youwant to trade--morning, noon or night.
5. FREE 'DEMO' ACCOUNTS, NEWS, CHARTS AND ANALYSIS: Most OnlineForex firms offer free 'Demo' accounts to practice trading,along with breaking Forex news and charting services. These arevery valuable resources for traders who would like to hone theirtrading skills with 'virtual' money before opening a livetrading account.
6. 'MINI' TRADING: One might think that getting started as acurrency trader would cost a lot of money. The fact is, itdoesn't. Online Forex Firms now offer 'mini' trading accountswith a minimum account deposit of only $200-$500 with nocommission trading. This makes Forex much more accessible to theaverage individual, without large, start-up capital.
Please visit the author's other trading sites to learn moreabout forex trading:
About the author:My name is Cynthia Macy and I've been trading various marketsfor over 12 years. I now concentrate on the forex market, as ithas several advantages over trading other markets. If you'd liketo learn more about forex trading, visit:
http://www.daytrade-forex.com Request the 'Trade of theWeek' to see actual trades using our trading methods andstrategies.
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